Correlation Between Walker Dunlop and BW LPG
Can any of the company-specific risk be diversified away by investing in both Walker Dunlop and BW LPG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Walker Dunlop and BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walker Dunlop and BW LPG Limited, you can compare the effects of market volatilities on Walker Dunlop and BW LPG and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Walker Dunlop with a short position of BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walker Dunlop and BW LPG.
Diversification Opportunities for Walker Dunlop and BW LPG
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Walker and BWLP is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Walker Dunlop and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited and Walker Dunlop is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Walker Dunlop are associated (or correlated) with BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of Walker Dunlop i.e., Walker Dunlop and BW LPG go up and down completely randomly.
Pair Corralation between Walker Dunlop and BW LPG
Allowing for the 90-day total investment horizon Walker Dunlop is expected to generate 0.65 times more return on investment than BW LPG. However, Walker Dunlop is 1.54 times less risky than BW LPG. It trades about 0.02 of its potential returns per unit of risk. BW LPG Limited is currently generating about -0.07 per unit of risk. If you would invest 11,138 in Walker Dunlop on August 28, 2024 and sell it today you would earn a total of 111.00 from holding Walker Dunlop or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Walker Dunlop vs. BW LPG Limited
Performance |
| Timeline |
| Walker Dunlop |
| BW LPG Limited |
Walker Dunlop and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walker Dunlop and BW LPG
The main advantage of trading using opposite Walker Dunlop and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walker Dunlop position performs unexpectedly, BW LPG can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BW LPG will offset losses from the drop in BW LPG's long position.| Walker Dunlop vs. Mr Cooper Group | Walker Dunlop vs. Velocity Financial Llc | Walker Dunlop vs. Security National Financial | Walker Dunlop vs. Encore Capital Group |
| BW LPG vs. Eldorado Gold Corp | BW LPG vs. Emerson Electric | BW LPG vs. Aerofoam Metals | BW LPG vs. RBC Bearings Incorporated |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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